Top 5 redundancy alternatives

Making an employee redundant can be challenging. It’s often stressful and requires hard conversations.

But what if there are actions you can take to avoid redundancies and retain your valuable talent?

Actually, before proceeding with redundancy, you are legally obligated to explore potential redundancy alternatives. More precisely, The Fair Work Act 2009 (the Act) includes provisions mandating employers to consult with affected employees and look for strategies to lessen the impact on them.

Here, we explore several potential alternatives to redundancy that you can consider.

Redeployment and redundancy

According to the provisions regarding unfair dismissal and redundancies in the Act, for a dismissal to be classified as a “genuine redundancy”, the employer must assess potential roles where the impacted employee could be redeployed. If appropriate roles are unavailable, the employer isn’t obligated to create a new position. However, if a suitable role does exist, the employer must offer it to the employee.

Also, regardless of the legal requirements, it makes sense to explore options for retaining skilled people within the company and maintaining their contributions. Of course, if the employee agrees to the redeployment, it’s important to document this agreement thoroughly and ensure clarity regarding the employment conditions associated with the new role.

Obtaining other acceptable employment

When it comes to alternatives to redundancy, you can provide affected employees with other suitable job opportunities which are outside of your organization. So, this alternative differs from “redeployment” in that the new job doesn’t have to be within your company or its related entities.

“Obtaining other acceptable employment” involves considering several factors, including pay, work hours, job security, location, etc. Therefore, you should thoroughly evaluate available options to ensure that the proposed job aligns with the employee’s needs and circumstances beyond just a simple match of skills.

Note: You need to obtain a job offer that employees can readily choose to either accept or decline. It’s crucial to maintain clarity that this is one of the possible redundancy alternatives and not a mandatory requirement.

Flexible working

Redundancies frequently happen as a result of employers needing to reduce their expenses. In that case, one suitable alternative to redundancy is providing your employees with flexible working arrangements ― both in terms of place and hours of work.

Start by evaluating whether all your employees need to be physically present in the workplace to do their job. For instance, employees in roles primarily involving computers or telephones can often do their tasks remotely. This can help you cut costs related to renting or maintaining a physical office space. Additionally, bear in mind that a growing number of people are seeking improved work-life balance and are open to reducing their workdays or hours.

Flexible working can help you avoid redundancies and better meet your employees’ needs. And you can choose to make these agreements either temporary or permanent. Before opting for any changes, feel free to contact our HR and employment experts to ensure a smooth transition.

Lowering training budgets

Regular training is an effective practice that can greatly enhance your company’s success. It also demonstrates your dedication to your employees’ growth. However, in times of uncertainty, training expenses might become a burden for your company, potentially influencing the decision between implementing redundancies or not.

In such situations, you have the option to either temporarily pause non-essential training or consider educating your employees to become licensed trainers (if applicable). This approach can help you reduce costs that would otherwise be spent on hiring third-party trainers.

Voluntary redundancy

We know. Voluntary redundancy is, technically, still redundancy. However, in this case, rather than the company initiating the redundancy process, you’re allowing employees to express their interest in leaving voluntarily.

Here, it’s crucial to understand that you can decide whether to approve the volunteers. And it would be best to communicate to employees right from the beginning that their choice to pursue voluntary redundancy might not be approved.

It’s also essential to avoid any potential discrimination. Therefore, if you’re considering redundancies in one specific sector, offer voluntary redundancy to the whole sector without singling anyone out. This helps you foster a transparent and fair process.

Redundancy alternatives: Take proven steps

Redundancies can stem from a range of reasons, from financial constraints to a lack of a need for certain positions.

But, regardless of the underlying reasons, you must first consider potential alternatives to redundancy and try to mitigate consequences for employees. Finally, you have to approach this process in a way that ensures the proper treatment of your employees, prevents potential legal issues and safeguards your reputation.

That’s why we’ve developed a comprehensive manual on redundancy in Australia. It thoroughly examines all the essential information you need to ensure “genuine redundancy” throughout your redundancy processes. Download your manual here.